Banking Reforms Panel to Probe New Banks, Corporate Entry: DFS Secretary

• DFS Secretary M Nagaraju announced a high-level committee will examine the need for new banks and corporate entry into the banking sector.
• The committee's remit includes addressing the delicate issue of allowing corporate houses to own banks, considering associated trade-offs.
• Nagaraju highlighted the necessity for banks with deep pockets to achieve Vikisit Bharat goals, noting that excluding corporates hinders investment.
• He explained that organic growth for new banks is slow, taking 15-20 years to reach a significant size, making corporate entry or FDI crucial.
• The committee will explore various options, including Indian corporate ownership with guardrails or increased FDI, to meet banking sector aspirations for Vikisit Bharat.

Why It Matters: A new banking reforms panel will assess the need for new banks and corporate entry to fuel Vikisit Bharat goals.